If you’re like many Americans, you may be working on your taxes for the past year. As the deadline approaches, it can cause a great deal of stress. Sometimes it is even necessary to file an extension.
If you’re tired of the stress that tax time creates for you, then start right now in organizing your paperwork for this year, so that doing your taxes next year will not be as difficult.
Organize Your Digital Tax Documents
Create a folder in your main email account for all online purchases. If you run a business or do any work from home, use a separate email address, to keep track of payments and expenses.
File your receipts into a “Receipts” folder and save those on a flash drive that you can store along with your tax return when it’s done next year. According to Bargain Babe, cloud based storage can also be used for storage of tax information.
Organize Your Physical Tax Documents
There may be some files you’d like to save the old-fashioned way. An accordion file works well for W2s, 1099s, home improvement receipts, mortgage interest statements and property tax receipts. Everything will be easily accessible next year.
Be sure that you write down the date and what the purchase was when you file your receipts. Otherwise, you may not remember what you bought, by the time tax time rolls around next year.
If you make donations to Goodwill, Salvation Army or other charities and they are property rather than cash, get a receipt when you drop your items off. Don’t be surprised, if you donate more than $500 of goods, if you are asked when those items were purchased, how you acquired them (gifts, etc), how much they cost originally and how you determined their basic thrift store value.
By keeping close track of your records as the year goes along, you won’t be stuck next year at tax time trying to find receipts from boxes and piles. Organization makes the whole process less stressful.